Skip to content
BizSalesGuyEddy Roche, HUB AZ Brokers

SBA Loan Calculator for Buying a Business

Eddy Roche, Associate Broker, HUB AZ Brokers

How much business can I afford?

Most buyers can afford a business priced at about 10 times the cash they put in, because an SBA 7(a) acquisition loan needs at least 10% of the price from the buyer. The business then has to earn enough to cover the loan payment 1.25 times over, on its past earnings. With $100,000 down that points to a price near $1,000,000, if the business earns roughly $180,000 a year in SDE at today's maximum SBA rate.
Price

Seller's discretionary earnings: the profit plus the owner's pay and one-time or personal expenses.

Only counts if the seller takes no payments for the life of the loan. Max half the 10%.

Lender practice, not SBA. Comes off earnings first.

Most you can likely buy

$1,000,000

Your cash sets this limit.

Your cash in (10% equity)
$100,000
SBA loan
$900,000
Rate (Prime + SBA max spread)
10.00%
Monthly payment, 10 years
$11,894
Yearly loan payments
$142,723
SBA guaranty fee (75% guaranteed)
$23,625
SDE needed for 1.25x coverage
$178,403

Estimates only. Not a loan offer, pre-approval or commitment to lend.

Next step

Get financing help or new listings

Tick what you want. I'll send your numbers to an SBA lender I work with, text you new Arizona listings that fit them, or both.

A mobile or an email is enough. Listing texts need the mobile.

If you give an email, Eddy Roche, HUB AZ Brokers may email you Arizona listings and market notes. Unsubscribe anytime.

What do you want?

Eddy Roche may share these details with an SBA lender he works with so they can contact me. BizSalesGuy may receive a referral fee from the lender. It doesn't change your rate or fees.

I agree to get recurring marketing texts, calls and voicemails about businesses for sale from Eddy Roche at HUB AZ Brokers at this number, including automated messages and an AI voice that may sound like Eddy. Not a condition of buying a business or signing an NDA. Msg frequency varies. Msg & data rates may apply. Reply STOP to cancel, HELP for help. See SMS Terms and Privacy Policy.

Not an SBA deal? Other funding options from Preferred Funding Group, outside the SBA program. I may receive a referral fee from these companies when you sign up through me. It costs you nothing extra, and you are never required to use them to buy or sell a business with me.

Uses SBA's rules for buying a whole business and the maximum rate a lender may charge: Prime at 7% plus SBA's spread for the loan size, 10-year amortization. Closing costs, working capital and real estate are not included. Rates and rules checked October 28, 2026.

How the calculator works

Two tests. The lower one is your number.

Cash × 10

You bring at least 10% of the price.

1.25× payments

Past earnings must cover the loan payments.

Two tests decide what you can buy with an SBA 7(a) loan. The first is your cash. You bring at least 10% of the price, so your cash times ten is the ceiling. The second is the business. Its past earnings have to cover the yearly loan payments 1.25 times. Whichever test is lower is your real number, and the calculator tells you which one it was.

The payment uses SBA's rate ceiling, Prime plus 3% on loans over $350,000, so a quote from a lender is often lower than what you see here. Smaller loans allow a wider spread, which is why a $200,000 deal can carry a higher rate than a $900,000 one.

SDE is seller's discretionary earnings: the profit, plus the owner's pay, plus one-time and personal expenses run through the business. It is the cash flow figure on my listings. How I build it for a seller is on add-backs and SDE in Arizona.

What changed on October 1, 2026

Coverage on past earnings
1.25×
Minimum buyer cash
10%
Seller can consult
24 mo
Needs a Quality of Earnings report
$3M+

SBA's SOP 50 10 8.1 applies to every loan numbered on or after October 1, 2026. For a buyer purchasing a whole business:

  • The business must cover its loan payments 1.25 times on historical earnings. Projections can't be used.
  • The buyer brings at least 10% of the project cost, and the lender can't lower it.
  • A seller note counts toward that equity only on full standby, no principal or interest for the life of the SBA loan, and only up to half of the 10%.
  • Every change of ownership gets full underwriting, whatever the loan size.
  • The selling owner can stay on as a consultant for up to 24 months.
  • Purchases of $3 million or more also need a Quality of Earnings report.

What that means on a listing: the price has to make sense on the seller's actual books. More on how buyers fund a deal is on SBA financing in an Arizona business sale and seller financing in Arizona.

Run it on a real listing

My listings that are for sale have a "Run your numbers" link that loads the asking price and cash flow into this calculator.

See the listingsHow buying works with me

Frequently asked questions

How much business can I afford?
Start with your cash. An SBA 7(a) loan to buy a business requires at least 10% of the project from the buyer, so $100,000 supports a price around $1,000,000 and $250,000 supports about $2,500,000. Then check the earnings: the business has to cover its loan payment 1.25 times on its historical cash flow. The calculator above runs both tests and shows which one limits you.
How much down payment do I need to buy a business with an SBA loan?
At least 10% of the total project cost for a buyer purchasing a whole business. Under SOP 50 10 8.1 the lender can't reduce it. A seller note can cover up to half of that 10%, but only if it sits on full standby, with no principal or interest paid, for the life of the SBA loan. Lenders also like to see cash left over after closing for working capital.
What debt service coverage ratio does SBA require to buy a business?
1.25 to 1 for the purchase of a business, measured on historical or adjusted historical earnings from the last fiscal year or a two-year average. Projections can't be used to meet it. In plain terms, for every $1 of yearly loan payments the business needs about $1.25 of cash flow. Many lenders also want the buyer's living expenses covered, which is why the calculator lets you enter an owner draw.
What is the interest rate on an SBA loan to buy a business?
SBA caps the rate a lender can charge. On a variable-rate 7(a) loan over $350,000 the ceiling is Prime plus 3%, which is 10% with Prime at 7%. Smaller loans allow a wider spread: up to Prime plus 4.5% from $250,001 to $350,000, Prime plus 6% from $50,001 to $250,000 and Prime plus 6.5% at $50,000 and under. The calculator uses the ceiling, so a lender's quote is often lower.
How long is an SBA loan to buy a business?
The business portion of an acquisition loan amortizes over 10 years. Real estate bought with the business can carry a longer term, which this calculator does not model.
What changed for SBA business acquisition loans on October 1, 2026?
SBA's SOP 50 10 8.1 applies to loans numbered on or after October 1, 2026. For a buyer purchasing a business, the coverage test is 1.25x on historical earnings, the 10% equity can't be reduced, a seller note counts toward equity only on full standby for the life of the loan and only up to half the injection, every change of ownership gets full underwriting at any loan size, and a selling owner can stay on as a consultant for up to 24 months. Purchases of $3 million or more also need a Quality of Earnings report.
Is this a loan offer or a pre-approval?
No. These are estimates from SBA's published rules and today's maximum rate. A lender decides after underwriting you, the business and its books. I'm a business broker, not a lender.
Can you help me get an SBA loan?
Yes. I introduce buyers to SBA lenders I work with. Run your numbers, then tick "Introduce me to an SBA lender" and I'll send your details to a lender who will contact you. The lender underwrites the loan and makes the decision. I may receive a referral fee from the lender, and it doesn't change your rate or fees.

Estimates only. Not a loan offer, pre-approval or commitment to lend. I'm a business broker, not a lender. Sources: SBA SOP 50 10 8.1, SBA Procedural Notice 5000-875051 (rate caps), 13 CFR 120.210 (guaranty), SBA FY2027 fee schedule.